a16z Crypto: What We See Behind the $2.2 Billion New Fund

Written by: Chris Dixon, Ali Yahya, Guy Wuollet, Eddy Lazzarin

Original title: We raised a $2.2B crypto fund

Compiled by: ChainCatcher

Cryptocurrency cycles often follow a certain pattern

Speculative waves bring attention and capital. Some of it is wasted, while another part funds infrastructure that would not have been built otherwise. When the noise subsides, what remains often looks more useful than it did at the peak and more durable than at the trough.

If you can step outside the confines of price, you will see this in every cycle: what has truly been built, and what people are still using after the hype fades. We are currently in such a relatively calm moment. The signals coming in are among the most encouraging in recent years.

The clearest evidence comes from stablecoins

Trading volume fluctuates with market ups and downs, but the usage of stablecoins continues to rise even during downturns. People use them for savings, cross-border remittances, and payments, a process that often exposes the slowness, high costs, and unreliability of traditional alternatives. The growth of stablecoins seems less like speculation and more like network adoption: the compound growth in usage is due to the utility of the technology itself, rather than people's expectations about price movements.

Blockchain is also proving its value in capital markets

Since the last cycle, we have witnessed significant growth in perpetual futures for price discovery, the role of prediction markets in revealing truths, and the development of on-chain lending in the stablecoin credit market. Traditional assets are starting to go on-chain, and on-chain finance is beginning to apply to assets beyond network tokens. A new financial system is taking shape—one that can operate continuously, settle almost instantly, has costs close to zero, and is open to anyone with internet access.

Regulatory direction is also improving. The GENIUS Act is a typical example of prudent policy: clear definitions, strong safeguards, and space left for builders to construct. We expect that other areas of the crypto market will also achieve more regulatory progress through legislation and rule-making. This will provide protection for consumers, certainty for builders, and pathways for mainstream institutions to participate.

It is worth taking a step back to consider: why is this particularly important now?

Software is becoming increasingly complex and harder to trust. AI systems are powerful but largely opaque. The infrastructure that the internet relies on is more centralized than ever before. In this context, the attributes offered by crypto networks become increasingly important, rather than less so:

• Transparent and verifiable systems
• Networks that are global from day one
• Economic models that align the interests of users, creators, developers, and operators
• Infrastructure that does not rely on a few intermediaries

These attributes are being reflected in actual products: in payments, financial services, creator platforms, decentralized infrastructure, and new modes of collaboration between people and machines. Most of these are being built by startups and are increasingly being adopted by financial institutions, tech companies, and other organizations to provide faster, cheaper, and more reliable services.

In practical terms, this means global instant remittances, not relying on banks to hold dollars, tokenizing assets for frictionless circulation, accessing composable networks for others to build upon, and embedding these capabilities into various applications. It also includes some new models that were previously never possible: users can directly own their assets and identities, holding inviolable digital property rights; clusters of software agents can make decisions, execute operations, and complete transactions on behalf of users, acquiring computing power, data, and services on demand, and increasingly autonomous networks can achieve self-funding, governance, and evolution through code.

This is why we are announcing the launch of the new Crypto Fund 5. This $2.2 billion fund is set up for this moment. The founders we support through this fund are focusing on parts of the cycle that receive less attention but we believe will generate more long-term value: transforming new infrastructure into products that people use daily.

Every significant computing platform ultimately gains meaning in this way; so too will crypto technology.